Thailand
ADB forecast on Brunei’s economic growth unchanged
Asia Development Bank’s (ADB) forecast for Brunei Darussalam’s economic growth remains unchanged in the latest Asian Development Outlook Supplement (ADO), July 2021 report published recently.
In May this year, ADB said that Brunei’s economy is expected to strengthen in 2021 and 2022, on an improving external environment with economic growth of 2.5 per cent this year and three per cent in 2022.
Growth in 2021 will be supported by a recovery in global demand and higher oil and gas prices, which will boost government revenue and support government consumption. Private consumption is expected to grow, as the economy continues to strengthen.
The gross domestic product (GDP) is forecast to rise in 2021 and 2022, supported by robust export growth from the Hengyi plant and higher oil and gas prices. But increased imports due to the plant’s expansion, and continued demand for inputs will temper the trade and the current surpluses in both years.
The main risks to the robust economic outlook are a weaker-than-expected global recovery, delays in large foreign direct investments, and unscheduled oil and gas supply disruptions.
ADB added that increased production at the Hengyi plant and Brunei Fertilizer Industries, starting production by the third quarter of 2021, will boost exports. Private investment and the construction industry will be bolstered by the building of a Halal meat processing and distribution centre, as well as the Phase 2 expansion of the Hengyi plant, valued at about USD13 billion and expected to begin in 2021.
ADB’s latest report said that recovery is under way in developing Asia, but with the growth projection for this year revised down slightly from 7.3 per cent in Asian Development Outlook 2021 in April to 7.2 per cent, following renewed virus outbreaks in some economies.
The projection for 2022 is upgraded from 5.3 per cent to 5.4 per cent. East Asia’s 2021 growth forecast is raised from 7.4 per cent to 7.5 per cent, reflecting a strong first quarter. Expansion in the People’s Republic of China is still projected at 8.1 per cent in 2021 and 5.5 per cent in 2022, as favourable domestic and external trends align with April forecasts.
In South Asia, new waves of infections prompt a lower growth forecast of 8.9 per cent for 2021, followed by growth at seven per cent in 2022.
India’s 2021 growth projection is downgraded from 11 per cent in April to 10 per cent, followed by 7.5 per cent growth in 2022.
The forecast for Southeast Asian growth in 2021 is downgraded from 4.4 per cent to four per cent, as some countries re-impose pandemic restrictions, followed by 5.2 per cent growth in 2022.
Central Asia’s growth prospects for 2021 are revised up from 3.4 per cent to 3.6 per cent. The Pacific forecast, by contrast, is slashed from 1.4 per cent to 0.3 per cent, as Fiji tightens containment measures. Regional inflation is expected to remain benign, the forecast revised up marginally for 2021 from 2.3 per cent to 2.4 per cent, but unchanged at 2.7 per cent for 2022.
In elaborating more on Southeast Asia, the 2021 GDP growth forecast for Southeast Asia is cut from 4.4 per cent in ADO 2021 to four per cent, because of mobility restrictions re-imposed to combat a COVID-19 resurgence across the region.
GDP forecasts are downgraded for Indonesia, the Lao People’s Democratic Republic, Malaysia, Thailand, Timor-Leste, and Viet Nam; unchanged for Brunei, Cambodia, Myanmar, and the Philippines; and upgraded for Singapore.
The GDP growth forecast for 2022 is revised up slightly from 5.1 per cent to 5.2 per cent, reflecting higher vaccination coverage expected by next year.
Source: https://borneobulletin.com.bn/adb-forecast-on-bruneis-economic-growth-unchanged/